Prada expects sales to slow as demand in Europe eases

Italian luxury handbag maker Prada has forecast slowing sales growth this year amid a maturing Chinese market and soft demand in Europe.

Same-store sales would rise at a "low single-digit" pace during this financial year to January, Milan-based Prada said yesterday, lower than last year's 7 per cent increase.

"All in all, a bit underwhelming," said Rahul Sharma, the managing director of Neev Capital in London. "I do sense some waning in the newness, coupled with a significant increase in Prada's price points."

Prada's outlook is in keeping with the broader luxury goods industry, where growth is being pegged back by softening demand in Europe and Asia, and the strength of the euro.

The industry expanded 2 per cent to €217 billion (HK$2.32 trillion) last year, the weakest pace in four years, according to Bain & Co.

Prada said the long-term outlook for luxury goods remained strong "despite possible short-term volatility", although the strength of the euro "does not help exports".